Phononic Devices has raised $10 million in a second round of financing to make your refrigerator cheaper and more energy efficient.

The company plans to do this with its thermoelectric, energy-efficient module (pictured below), which could one day replace traditional refrigerator technology and has potential in other cooling and heating markets. Right now, most refrigerators use compressors, CEO Anthony Atti says are comparatively large, noisy, involve chemicals and “expensive compared to the amount of cooling they provide.” Phononic, backed in part by a $3 million government ARPA-E award, wants to replace those with its thermoelectric materials and engineering. The company previously raised a $2 million round.

“The idea is to take advantage of the very same quiet, compact, lack of moving parts [traits] that thermoelectric devices already have, but introduce a materials systems with more efficiency,” Atti said.

Thermoelectric technology basically harvests energy as heat is transferred from hot to cold. Waste heat can be converted to power, or, conversely, electricity can be used to remove heat for refrigeration or cooling purposes. Waste heat-to-energy isn’t a new concept, and in fact is capturing the attention of a few companies. GE, for example, last year acquired Calnetix, a company whose systems can convert waste heat from industrial processes into electricity.

Thermoelectrics isn’t a new thing, but in the past, it has been crippled by cost and low efficiency — it’s used today for applications like portable heaters, Att says.He thinks Phononic’s technology can solve those issues with modules that manufacturers can integrate into their products.

The company will be using the newly raised funds to create and test prototypes and prepare for commercialization. It plans to bring products to market in 2013.